Find a ‘Discovery Platform’ to Connect With Investors

GUEST MENTOR Arie Abecassis, venture partner at DreamIt Ventures: There’s an expression that folks use when it comes to raising outside money for their startup: if you need money, ask for advice, and if you need advice ask for money. In my experience as a seed-stage investor and entrepreneur, I can vouch that this rings true.

As has been covered in earlier posts, the most favorable dynamic for an entrepreneur is to generate inbound investor interest in his or her company. This re-frames the discussion about investment in a subtle way, and enables an entrepreneur to drive more of the discussion. Since many investors enjoy the discovery process, founders who put themselves out there and establish an identity within their industry segment tend to increase their odds of surfacing interested investors.

So, what do we mean by a “discovery” platform and how does one get potential investors to discover them?

In the broadest terms, it can mean getting exposure through a social or marketing channel that lends credibility to a startup’s mission. That can include writing a thought-leadership piece in a relevant trade magazine or becoming a vocal member of a trade association.There are many examples of entrepreneurs who have done this well — in fact, all the way through exit — including Michael Lazerow of Buddy Media (now part of SalesForce) and Chris Dixon of Hunch (now part of EBay).

However, in this context, I would like to narrow the definition of a discovery platform to mean an online platform that gets a startup’s product or service into the hands of users in its early stages.

With the arrival of “crowdsourcing” and the widespread appeal of companies like Kickstarter and IndieGoGo, consumers have the unique opportunity to participate in the success or failure of bringing a product to life. This movement has been referred to as “collaborative consumption,” and it presents a compelling opportunity for entrepreneurs to create a “wow” moment and at the same time stir attention in unexpected ways.

A case in point: GraFighters, a New York City-based startup that has developed a web app that brings drawings to life and allows users to engage them in battle.
Grafighters was founded by two Syracuse University students, Eric Cleckner and Dave Chennel, who met in class and became quickly fascinated by whose doodles would win in a battle. They started working on a website to bring the idea to market, and soon launched a Kickstarter campaign to help them offset some of their costs and get early customers. While their campaign failed, and they weren’t able to reach their goal, they were able to galvanize the interest of a partner at a European-based VC fund, whose son tried the product and loved it. He invested $200,000 into the company.

Fast forward, when the GraFighters team looked to transition their web app to mobile, they listed their product vision in AppStori and were able to meet their goal and gather useful market feedback for the app (full disclosure: I’m a cofounder at AppStori). Again, several investment funds and investors caught wind of the app, liked what they saw and expressed interest in investing. The app is expected to launch next month.

There are numerous stories like this, and it’s not all that surprising. A discovery platform that makes it easy to test the product or service, get to know the team and engage with them, provides an early indicator into whether a project can become a market success. This level of due diligence is invaluable to investors, which is why quite a few of them scour these types of communities for their next investment. A catchphrase made famous by Victor Kiam in a different time, but one that still should resonate with entrepreneurs today: “I liked the shaver so much, I bought the company.”

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